Why is TikTok's algorithm captivating the world? The buzz isn't accidental: The blueprint of TikTok's consistent "interest signals"

"Whose Hands Ultimately Control TikTok's Algorithm?"——This question once again stirred global news and social media in December 2025. The catalyst was ByteDance, the operator of TikTok, signing an agreement to form a "U.S.-led new company (joint venture)" to continue its business in the United States. While this is seen as a significant step forward to avoid the risk of a ban, the crucial issue of how the "recommendation algorithm" is handled remains unclear.InfoMoney

1) Why is the "algorithm" becoming a political issue now?

TikTok's strength lies in its recommendation system, which acts like a "hit detection machine," continuously suggesting videos based on "what you react to" rather than who you are connected with. This is why if a nation or organization can influence this system, it could extend to news exposure and public opinion formation——this is the background of why the algorithm has been central in U.S. security discussions. The AP also highlights that U.S. authorities have warned that "ByteDance's algorithm could be manipulated by Chinese authorities."AP News

This agreement seems to be the "resolution" of the long-standing tug-of-war between "sale or ban." However, it simultaneously raises doubts about whether the "most important asset is truly separated."Reuters

2) The contents of the "U.S. JV": What moves and what stays?

According to reports, under the new framework, TikTok USDS Joint Venture LLC will be established, involving Oracle, Silver Lake, MGX, among others. ByteDance is expected to limit its stake to 19.9%, and the board of directors is designed to have a "U.S. majority."Reuters

Furthermore, U.S. user data will be stored domestically under Oracle's management, and the JV will handle "data protection, algorithm safety, and content moderation"—this is the general outline.Reuters

On the other hand, it is suggested that parts of the revenue-generating areas (advertising, e-commerce, etc.) will be controlled by a separate ByteDance organization, raising the issue of "how genuine is the operational independence?"InfoMoney

3) Why the "recommendation" remains the biggest issue

TikTok is a "recommendation app" before it is a "video app." Users do not search for what they want to see; the sequence of videos that flows continuously is the core of the experience. In other words, the algorithm is the "crown jewel" that determines the service value, more than the UI or features. Articles from Reuters/InfoMoney also mention that ByteDance was reportedly saying "we would rather shut down the app in the U.S. than sell it" until a few months ago.InfoMoney

Even with this agreement, whether the algorithm is "transferred," "licensed," or effectively remains in Beijing (China) is ambiguous——as pointed out by former U.S. NSC member Rush Doshi on X, which spread symbolically.InfoMoney

4) The mechanism that makes TikTok's recommendation "special": "Interest signals" over social graphs

Reuters provides a clear explanation. While Meta and others have focused on networks of human relationships (social graphs), TikTok centers on "interest signals." Likes, watch time, repeats, skips, comments, saves——these subtle reactions collectively estimate "what resonates with this person now" and determine the next video.InfoMoney

The important point here is that even with a small number of followers, if you hit the mark, it can grow significantly. It can be said that TikTok has redesigned SNS as a "flow of interests" rather than a "gathering of people."

5) Short-form × Mobile × First-mover advantage: The "rotation speed" of data is different

TikTok's short-form format accelerates algorithm learning. The shorter each video is, the more choices (continue watching/skip) users make in a short time. In other words, "training data" accumulates quickly. Reuters states that it can become dynamic enough to track preference changes at the level of time of day.InfoMoney

Furthermore, TikTok is designed with mobile in mind, contrasting with existing SNS that optimized PC-derived UIs for smartphones. Additionally, by entering the short-form market before Reels (2020) and Shorts (2021), TikTok has built a time advantage in data and product improvement—this "first-mover advantage" is also effective.InfoMoney

6) Research shows the balance of "exploration" and "exploitation"—missed hits were "by design"

The common feeling of "Why this video?" may not be a bug but a design. Reuters/InfoMoney articles introduce that TikTok has explained that regularly mixing content that does not match user interests is "essential to the experience."InfoMoney

Academic research suggests that TikTok's recommendations not only align with interests (exploitation) but also explore interests (exploration) by mixing videos at a considerable ratio. For example, a paper from TheWebConf 2024 (published by ACM) reports results indicating that the ratio of "exploiting user interests" in recommended videos is approximately 30-50%.ACM Digital Library

This "inclusion of exploration" not only refines the estimation of user preferences but also functions as a stimulus (novelty) to prevent disengagement. In other words, TikTok's strength lies not only in "continuously hitting the mark" but also in "being good at missing."

7) China's export regulations could become the "final hurdle"

One reason why separating the algorithm is difficult is due to China's regulations. The U.S. Congressional Research Service (CRS) materials outline that in 2020, China added social media algorithms to the list of export-controlled items, and that the authorities could apply export controls to ByteDance's separation.Congress.gov

In other words, even if the U.S. side demands "cutting ties including the algorithm," if Chinese authorities' approval is involved, "transfer" is not easy. This is why the current framework is seen as leaning towards "audit and supervision" or "licensing" rather than "transfer."

8) SNS reactions: A "split timeline" of welcome and distrust

The news also divided reactions on social media.

(A) "Whose algorithm is it, after all?" camp (skeptical)
Rush Doshi's point about whether it's a "transfer or license, and is Oracle just 'monitoring'?" articulated this skepticism.Reuters+1
On Reddit, there are speculations that "it's actually a license, and control over the algorithm remains," with voices questioning the distance between formal separation and reality.Reddit

(B) "A practical compromise" camp (positive)
On the other hand, in business-oriented social media, there are posts positively viewing it as a "typical deal in the era of data sovereignty." On LinkedIn, there is a narrative appreciating Oracle becoming a data "fortress," retraining the algorithm with U.S. data, and auditing it.LinkedIn
Market reactions also report a rise in Oracle's stock, indicating that from an investor's perspective, there is an appreciation for the "reduction of uncertainty."AP News

(C) "Is it collusion between politics and billionaires?" camp (critical)
Politically, Senator Elizabeth Warren expressed concerns about "many unresolved questions" and whether it is "backdoor control by billionaires," as reported by Reuters.Reuters
Similar concerns are emphasized in critical media (as a trend).Common Dreams

9) What can creators and companies learn from this?

While politics and regulations tend to take the forefront, the core for operators is different. If TikTok's recommendation prioritizes "quality of reaction and initial speed" over "number of followers," what needs to be done becomes clear.

• Capture "signals" in the first 1-2 seconds: Viewing retention (drop-off/completion) tends to become the most important behavioral data.

• Leverage the exploration frame: With the premise of reaching outside the target, editing, captions, and revealing conclusions that convey even without context are effective.

• Create a series to "train": Repeat the same theme format to accumulate interest signals.

• Increase engagement with comment design: Induce discussions and draw out active actions.

Conversely, for advertising and marketing, the idea of not only "who to distribute to" but also "in what order to show (train)" becomes important. In TikTok, the design of distribution itself becomes part of the creative.

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